Digital Banking and Bill Pay: Your Number One Branch of the Future


Part 1 of 3-part series

Consumer sentiment is changing throughout the financial industry, and credit unions everywhere should take note.  While following the credit crisis mega banks saw many of their customers flee into the arms of credit unions, today that is no longer the case. 

“Banks have stepped up their digital strategy and investments in the platform, and these investments are paying off,” said Stephen Bohanon, founder and chief strategy and sales officer for Alkami Technology, Inc. “Banks today are delivering a much more engaging digital experience for customers, and retaining them as a result.”

In fact, research indicates that mega banks have closed the customer service gap by 50 percent, purely based on delivering a superior online experience.  With 60 percent of financial transactions completed digitally today – a number that is expected to jump to 90 percent within five years – it is more important than ever for a credit union’s digital platform to meet and exceed member expectations.

“Consider also that the average digital banking customer accesses the system three to four times a week, but visits a branch once a month,” said Bohanon.  “For credit unions, this means that a member’s opinion of your institution and the service you provide is determined almost exclusively by the quality of your digital banking solution.”

Engaging Today’s Digital Consumer

According to Jon Bartek, sales director for CO-OP Financial Services’ digital banking product line, what members expect from digital banking is changing and advancing rapidly.

“For today’s digital consumer, it is all about speed and convenience,” he said.  “If a member can securely transfer funds with a quick tap on a smartphone versus going to a branch or even logging into a PC, that member will choose the mobile option every time.”

Bartek emphasizes that digital banking is at its best when it delivers “one-stop shopping,” whereby members have their entire financial picture in front of them and can conduct all transactions from a consolidated view.  “Members today want a seamless digital experience and a single landing pad for all their financial transactions,” he said. 

The Importance of Bill Pay

According to Bartek, to create a seamless experience there must be tight integration between the digital banking platform and a best-in-class bill pay application. “The easier it is for members to setup, access and manage the bill pay application from within the digital banking solution, the more they are apt to use it,” he said.   

And while bill pay applications are designed primarily for viewing, paying and filing bills electronically, the solution you choose should extend well beyond this basic functionality.  “The ability to expedite a payment the same day or overnight is essential, and advanced features such as person-to-person payment options are becoming increasingly important to consumers,” said Bartek.  “The application should also be highly intelligent with respect to member notifications and alerts.  Should anything go awry with a payment, the member needs to know about it immediately.”

And while Bartek affirms that not all credit union members will ultimately take advantage of digital bill pay, those that do are typically top-tier members.

“According to the research, members that use their credit union’s bill pay application maintain balances that are two to 12 times higher than members that don’t,” he said.  “And active bill pay users are 35 percent less likely to end their relationship with the credit union.”

He continued, “Digital platforms are redefining the banking industry as consumers are increasingly drawn to them.  While physical branches will always have their place in the credit union business model, there will come a time when many of your members may never set foot in one.  So to remain prevalent and relevant in the marketplace of tomorrow, remember that an investment in digital is an investment in your number one branch.”

For expert insights on how to take digital banking to the next level, read “Digital/Mobile Banking; The Indispensable Utility That’s Also Integral to Your Strategy for Success,” a free white paper available exclusively from CO-OP Financial Services.

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Other Articles in this Series:

Part 2 – Intelligent Design Applied: Creating the Ultimate Digital Branch

Part 3 – Going Mobile: Perfecting Digital Banking for a Nation of Multi-Screeners

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